Building brands through ATMs

From traffic signs and election ballots to stock tables, tax forms and ATM screens, the quality of information design can make or break the user experience. For financial services firms, the presentation of information is increasingly regarded as a core product offering as well as a source of competitive advantage and brand preference. Accordingly, this is an area that needs to be really thought through in an increasingly competitive market.

First things first: for the more sceptical among us, branding is simply a marketing exercise. So why is developing a strong brand so important to your average firm? “Brand experience is the connection between the company or the product or the service, and the customer,” Phillips explains. “So the brand ultimately becomes the customer’s perception of the company product or service. The better you can define the brand and create compelling, memorable, experiences, the more likely the customer will look favourably upon your company. In a commoditized world of products and services, the differentiation is the brand.”

In financial services this is a particular issue – lots of financial products are fairly standard, and while the interest rate and the terms and conditions can vary, ultimately there is a limit with what you can do to a deposit account or an auto-loan to make it distinct from the competition. For Phillips this is where the brand communication is so important: “In the financial services sector, conveying a meaningful brand becomes very much a customer service proposition,” he says.

Phillips explained how financial services’ companies have various ‘touch points’ through which they must concentrate on getting their brand communications right. The obvious physical touch point is the bank itself. “Certain banks seem more relaxed, friendly and user-friendly, whereas other banks seem more formal and cold,” he says. “Communicating the brand through this touch point is all about the physical environment reflecting the ‘brand-personality’ of the financial institution.”

Equally important are digital touch points, such as banks’ websites and ATMs. According to Phillips, the key to communicating through these is to create an online experience that is “very engaging, very simple to use and very user-friendly.” What Phillips means by an engaging, user-friendly experience is not just an ATM that dispenses cash as quickly as possible, but a machine that has some feature functionality that makes life easier for the customer.

“One thing to be aware of is that the ATM experience is becoming more web-like,” says Phillips. “Now I can use the ATM as if it’s a desktop connected to the web, so we’re seeing this movement where ATM and web technologies are coming together.” And what does this mean for the customer? “With what I’d call ATM 1.0, you could just do banking; it was a only a place to go to make a deposit or get some money. But now you can pay bills, do some convenience shopping, be recognized as a personal account holder and get some local offers sent your way, or you can print out stamps or theater tickets – things like that. Some banks are adding real functionality.”

The key behind adding successful functionality is to keep an eye on respecting your customer’s time. “The functionality has to make things more convenient for me, banks have to realize that convenience has to make better use of my time,” says Phillips. As an example of how not to do this, he cites automated telephones lines as a technology that has added functionality but not helped customers. “There’s something of a backlash now against all of the banks where you as a customer have to navigate the automated menu system. So technology can become a hindrance – it’s a difficult area.”

Another area where web technology can be utilized to add to the customer experience and build the brand is through the use of automated alerts. Phillips explains how a customer feels when they receive an alert telling them their balance has dropped below a certain threshold, or they’re approaching their credit limit. “I might get a text message saying my balance has fallen below US$2000 and I need to move some money to avoid going overdrawn. I feel like they’re on my side and are trying to help me avoid silly mistakes, as opposed to waiting and hitting me with a US$29 service charge – which is only going to hack me off.”

The net effect of this kind of alert is twofold: it helps the bank build its brand, and it helps the customer stay loyal. And importantly, it can help with the kind of below the line promotion that every bank loves – customer recommendation. “I end up saying to my friends: ‘Hey you know what, a really cool thing happened to me with my bank – they sent an SMS to my blackberry to warn me that I was about to get a fee – what great service’. That’s the kind of publicity that a bank really can’t buy.” According to Phillips, this kind of customer service can give banks a real competitive edge.

Of course, it’s not just the technology of ATMs and web functionality that banks need to get right; the effect of the physical architecture of the ATM is becoming increasingly important. Phillips argues you need to think about how your ATMs are physically presented to ensure you’re communicating the right brand-personality. “The ATM is, of course, a representation of the company, so some banks are taking pains to re-design the vestibule where the ATM sits to feel more inviting, better lighted – just a bit more of a comfortable environment to be in, as opposed to feeling like you just walked in to buy a bus ticket somewhere.” Phillips cites Citibank and Bank of America as examples “where the ATM interface and the entire kiosk is getting much more well designed and user-friendly”.

While this focus on design and customer service makes intuitive sense in a perfect world, the fist question that most executives will be asking is the obvious one: how much does it cost? It’s a question we put to Phillips, as presumably none of this comes cheap. “I guess cost is a relative issue,” he says. “Through their research, banks understand there are some emotional and psychological issues for customers that, if the bank can get right, will lead to increased loyalty. And you know it’s of course cheaper to keep a customer and get more of their assets under management that it is to generate a new one.”

And as Phillips points out, if you’re not maximizing your customers’ experience of your bank, you can bet one of your competitors will be only too happy to step in. “The overall competitive arena, where all the big banks are fighting for the same customers, means that if one bank improves its customer experience then woe betide the next bank that doesn’t – it won’t be perceived as being modern or current if it doesn’t keep up.” Phillips compares this competitive environment to a “heavyweight boxing match”.

And for Phillips the key to making sure investment in building your brand pays off is to get executive buy-in. “The success of a branding initiative is directly related to the amount of attention the C-level executives show it,” he says. “If a chairman or CEO is behind it and regularly talks to all the associates about the importance of the brand for competitive advantage, it’s more likely to succeed – people will take responsibility and carry those brand messages to the marketplace.”

Phillips leaves the conversation with a final thought about the importance of getting the technology to facilitate the right customer experiences. “Financial institutions are beginning to clamor over ‘Generation Y’. These are the teenagers who have grown up with iTunes, instant messaging and cell phones, and were born with laptops and PCs. This is going to be a very tech-savvy generation. And they will expect the brand they do business with to be able to keep them wired and up-to-date, and develop personalized products and services for them. Making sure you’re ready to cater to this generation is going to be a huge challenge for the next 10 years.”

Eliot Phillips heads Lippincott Mercer’s Interactive Communications practice and is an expert in information architecture and user experience design strategy. Since joining the firm in 2001, he has consulted to American Express, Ameriprise Financial, The Bank of New York, Citibank, Citigroup, Guardian Life and MasterCard among others. Before this he was chief e-strategy officer and managing director at BusinessEdge and Senior Vice President and Senior Interactive Strategist with the branding firm Siegel & Gale.

ATM facts and figures

Total US ATM machines (2005)
396,000

Total US ATM transactions (2005)
10.5 billion

Bank ATM Costs

• US$9000-50,000 per machine (depending on functions)
• US$12,000-15,000 annual maintenance costs (cash replenishment, servicing, telephone costs, rent, etc.)

Top six ATM owners (2005)
Bank of America: 16,000
Cardtronics: 9480
US Bancorp: 6780
JP Morgan Chase: 6650
Wells Fargo: 6251
7-Eleven: 5341

Off-branch ATMs in US (2005)
266,000 (67.2 percent of total)